function calculateMortgage() {
var homePrice = parseFloat(document.getElementById("homePrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var resultBox = document.getElementById("calc-result");
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
alert("Please enter valid numbers for all fields.");
return;
}
if (downPayment >= homePrice) {
alert("Down payment cannot be equal to or greater than the home price.");
return;
}
// Calculations
var principal = homePrice – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var monthlyPayment = 0;
if (interestRate === 0) {
monthlyPayment = principal / numberOfPayments;
} else {
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
var mathPower = Math.pow(1 + monthlyRate, numberOfPayments);
monthlyPayment = principal * ((monthlyRate * mathPower) / (mathPower – 1));
}
var totalPayment = monthlyPayment * numberOfPayments;
var totalInterest = totalPayment – principal;
// Display Results
document.getElementById("displayLoanAmount").innerHTML = "$" + principal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("displayMonthlyPayment").innerHTML = "$" + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("displayTotalInterest").innerHTML = "$" + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("displayTotalCost").innerHTML = "$" + totalPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultBox.style.display = "block";
}
Understanding Your Mortgage Payment
Calculating your monthly mortgage payment is one of the most critical steps in the home-buying process. Using a specialized Mortgage Calculator helps prospective homeowners estimate their monthly financial obligations accurately. By inputting variables such as the home price, down payment, interest rate, and loan term, you can determine exactly how much you will need to budget for housing costs.
How the Mortgage Formula Works
While this calculator handles the heavy lifting instantly, understanding the underlying math can be empowering. The standard formula used by lenders to calculate monthly payments is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
M: Total monthly payment.
P: The principal loan amount (Home Price minus Down Payment).
i: Your monthly interest rate (Annual Rate divided by 12).
n: Total number of payments (Loan term in years multiplied by 12).
Key Factors Affecting Your Payment
Several variables can significantly impact your monthly mortgage costs:
Principal Amount: This is the amount you borrow. A higher down payment reduces your principal, thereby lowering your monthly payments and the total interest paid over the life of the loan.
Interest Rate: Even a fraction of a percentage point difference in your interest rate can result in thousands of dollars in savings (or costs) over a 30-year term. Rates are influenced by your credit score, the broader economy, and the loan type.
Loan Term: A shorter loan term (e.g., 15 years) typically comes with a lower interest rate but higher monthly payments compared to a 30-year term. However, the total interest paid on a 15-year loan is significantly less.
Example Calculation
Let's look at a practical example to illustrate how these numbers interact. Suppose you purchase a home for $300,000.
Down Payment: You pay 20% upfront, which is $60,000. This leaves a loan principal of $240,000.
Interest Rate: You secure a fixed rate of 4.5%.
Loan Term: You choose a standard 30-year mortgage.
Using the calculator above, your monthly principal and interest payment would be approximately $1,216.04. Over the course of 30 years, you would pay a total of $437,776, meaning you would have paid $197,776 in interest alone.
Why Use a Mortgage Calculator?
Before speaking with a lender, using a calculator allows you to experiment with different scenarios. You can see how saving for a larger down payment might affect your monthly budget or how an increase in interest rates might change your purchasing power. This tool provides the transparency needed to make informed real estate investment decisions.